Faridah N Kulumba
Africa-Press – Uganda. The government of Uganda decided to scrap off all construction work it signed with a Chines company to build a billion dollars railway from its border with Kenya to the capital city Kampala after the project failed to start for years.
On 12th January 2023, Uganda agreed to give a Turkish private company Yapi Merkezi a contract to build the Tanzania Standard Gauge Railway (SGR) after years of inaction by China on the project.
The distance and costs
Yapi Merkezi company to build a 273-kilometer (170-mile) section of the railway line from Malaba border to Kampala that is expected to cost USD2.2 billion.
Why Chines company was dropped
At first, Uganda had contracted the Chinese company China Harbour Engineering Company (CHEC) to build the SGR, but after eight years of no execution, Uganda opted for Yapi Merkezi to build the line.
Not even a trip by the President of Uganda Yoweri Kaguta Museveni to China in 2018 could convince the China Exim Bank, which has been financing its projects, to approve the promised financing, thus forcing the government of Uganda to start looking for funds in other countries.
Uganda explained that from the time of their last financial submission in February 2021 until today, they did not receive any feedback from the bank.
Uganda’s Attorney General Kiryowa Kiwanuka was forced to review the contract with CHEC after it became evident that the China Exim Bank was reluctant to finance the SGR project.
Last year, frustrated by the lack of progress after three years since the Ugandan government signed a contract with Chinese firm China CAMC Engineering Company Limited to procure, design, supply, install, and connect seven hydroelectric substations, President Museveni ordered the cancellation of the USD223 million power project agreement.
China’s defense
China’s Ambassador to Uganda Zhang Lizhong defended China by saying that his country was economically affected by the Covid-19 pandemic, which is why after the coronavirus pandemic, Beijing became more cautious about financing big infrastructure projects in Africa.
Funders
According to Uganda, the railway line will be funded by loans but with the new company Yapi Merkezi on board, the financing model will also change. It expects to tap into the network to bring Export Credit Agencies (ECAs) on board that will finance the Venture.
Sneak peek into the agreement
Uganda and Yapi Merkezi signed a memorandum of understanding, this was confirmed by the SGR Project Coordinator Engineer Perez Wamburu who revealed that Yapi Merkezi and the company is expected to submit a response to the request for a construction proposal within weeks, paving the way for procurement.
About Yapi Merkezi
Yapi Merkezi is a Turkish privately-owned contracting company, specializing in rail construction, designing, and manufacturing. It also has experience in electrification, signaling, and telecommunication.
Yapi Merkezi’s headquarters is in Istanbul and was founded in 1965 by Ersin Arioglu and Koksa Anadol. The company spread its wings in several countries including United Arab Emirates (UAE), Qatar, Saudi Arabia, Algeria, Morocco, Ethiopia, and Tanzania.
Yapi Merkezi is known for constructing railway lines such as Eurasia Tunnel, Dubai Metro, Ankara-Konya high-speed railway, Kayseri Tramway, Izmir Metro, Bursa Light Rail System, Casablanca tramway, Istanbul Metro, Istanbul modern tram, Tanzania Standard Gauge Railway (TSGR), Medinah High-Speed Train Station, and many more.
Uganda-Turkish relations
The relationship between Turkey and Uganda has greatly improved in recent years. The construction sector is the driving force. Turkiye’s presence in Uganda is growing with contractors carrying out major development initiatives in the public and private high-tech infrastructure.
Turkey employs about 4,000 Ugandans in the ventures they are involved in and expressed interest in the Turkish construction firms being allocated more roads. The two nations have a strong commitment to development cooperation in the sectors of infrastructure, manufacturing, education, tourism, and health.
The records from Turkey’s Ministry of Foreign Affairs show that Turkey’s bilateral trade volume with Uganda was USD41 million in 2019, which increased to USD63 million in 2020, and in 2021 the trade volume increased to USD71 million. Turkish exports to Uganda increased by 26 percent, and Uganda’s exports to Turkey increased by 418 percent.
Turkey had no significant relations with Uganda, although a number of Turkish firms conducted business in Uganda with Uganda, particularly during former President Idd Amin’s regime, The Turkish Embassy in Kampala, and the Ugandan Embassy in Ankara were inaugurated in 2010.
The relations between the two countries are developing steadily as a result of high-level visits between the two nations and the willingness of both countries to work together.
Another Turkish company in Uganda
In September 2021, a Turkish company Polat Yol Yapi won a mega deal from Uganda National Roads Authority (UNRA) to upgrade a 92-kilometer (57-mile) road which will link Uganda to Kenya, South Sudan, and Ethiopia.
Polat Yol Yapi was advanced to Shs 71 billion to immediately kick off the construction considering the urgency of the project.
Muyembe-Nakapiripirit road, which will link Uganda to Kenya, South Sudan, and Ethiopia.
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